ETHIOPIA-ETHIOPIAN AIRLINES Ethiopian Airlines says expansion on course as profit jumps

Record ID: 143430

  • Title: ETHIOPIA-ETHIOPIAN AIRLINES Ethiopian Airlines says expansion on course as profit jumps
  • Date: 20th August 2015
  • Summary: ADDIS ABABA, ETHIOPIA (AUGUST 18, 2015) (REUTERS) VARIOUS OF ETHIOPIAN AIRLINES CEO TEWOLDE GEBREMARIAM SPEAKING (SOUNDBITE) (English) ETHIOPIAN AIRLINES CEO TEWOLDE GEBREMARIAM SAYING: "We have planned for 43 Ethiopian billion birr by 2015 but the last fiscal year we closed about 49.4 billion Ethiopian birr revenue. This is gross revenue. The same with profitability. Profitability for the fifth year which is the last financial year 2.9 billion birr, but we closed the year with 3.5 billion birr net profit."
  • Embargoed: 4th September 2015 13:00
  • Keywords:
  • Location: Kenya
  • Country: Kenya
  • Topics: General
  • Reuters ID: LVAAS7XOSMLJ68BLX5B9BA3UQ2J2
  • Aspect Ratio: 16:9
  • Story Text: PLEASE NOTE EDIT CONTAINS 4:3 MATERIAL
    Ethiopian Airlines is powering ahead with a plan to expand its fleet and route network after it exceeded its profit target for its 2014/15 year, its chief executive said.
    The state-owned carrier is ranked the largest in Africa by revenue and profit by the International Air Transport Association (IATA), the global industry body.
    Tewolde Gebremariam said the firm had revenue of 49.4 billion birr (2.39 billion US dollars) in its fiscal year ended July 7, exceeding a target of 43 billion birr.
    "We have planned for 43 Ethiopian billion birr by 2015 but the last fiscal year we closed about 49.4 billion Ethiopian birr revenue. This is gross revenue. The same with profitability. Profitability for the fifth year which is the last financial year 2.9 billion birr, but we closed the year with 3.5 billion birr net profit," he said in an interview with Reuters.
    Ethiopian Airlines plans to increase revenue to 10 billion US dollars by 2025 by nearly doubling its fleet of 77 planes and opening new routes.
    It currently has 77 planes, including 13, 787-8 Dreamliners by Boeing - one of which was on display during the visit by US president Barack Obama to the country last month. The airline ordered six more Dreamliners in June and has 50 airplanes on order altogether, including 14 Airbus A350. It expects to increase its fleet of Dreamliners to 30 in ten years time.
    Tewolde attributed the growth to rise in passenger numbers, and expansion of maintenance, catering and aviation training services.
    The carrier flew six million passengers in the prior year from 5.22 million in 2012/13.
    However, Tewolde cautioned about the ongoing impasse in United States over the U.S. Export-Import Bank, which lends money to U.S. exporters and their foreign customers like Ethiopian Airlines.
    The 81-year old Ex-Im Bank saw its charter lapse last month after conservatives in the U.S. Congress cast it as a promoter of "crony capitalism" for multinationals such as Boeing and General Electric.
    "For us it is an essential financial instrument and we have been working with the US Ex-Im Bank for more than 30, 40 years now and we have a very good relationship and the bank has a very good level of confidence on Ethiopian Airlines. So, we want the US EX-Im BANK to reopen and that was our main point of discussion with President Obama," said Tewolde.
    The airline has targeted the growing trade ties between Asia and Africa in recent years, as well as that with Brazil by inaugurating flights to Rio de Janeiro. It also launched flights Los Angeles and Toronto this year.
    Tewolde said Ethiopian Airplanes is planning Jakarta, Ho Chi Minh City and other new Asian destinations, as well as adding Oslo in Europe and New York and Chicago in the United States.
    "We are studying Jakarta, Indonesia and Ho Chi Minh City in Vietnam and more points in India and of course more points in China, we are studying Chengdu and Shenzhen closely," he said.
    Tewolde said Ethiopian Airlines was reaching out to other African carriers and encouraging them to strengthen their operations to better serve flyers on the continent.
    Non-African carriers now account for 80 percent of travel between Africa and the rest of the world, up from 40 percent in the 1980s.
    "The continent in general is still underserved and the continent's market share is skewed towards non African carriers. So, Ethiopian Airlines strongly believes that Africa should have a very strong aviation sector, indigenous carriers, indigenous airlines, owned and managed by Africans," said Tewolde.
    Many African states adopted the Yamoussoukro Decision in 1999 to open up intra-African aviation routes but so far the decision has not been implemented by governments, meaning air travel between countries in Africa largely remains restricted.
    Airlines body IATA says eight of the 10 fastest growing markets in terms of percentage growth in passenger demand over the next five years will be in Africa.
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